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Enterprises demand innovative CIOs

IT leaders will face greater demands to play a strategic role in the enterprise, McKinsey reports.

As disruptive changes make just maintaining the status quo a challenge for any CIO, executives throughout the enterprise are looking to the IT department to play a bigger and more innovative role in the business. The 2011 McKinsey Global Survey collected responses from more than 900 global executives, finding that not only are business leaders demanding more of their CIOs, they’re also willing to spend more on IT.

McKinsey & Company’s sixth annual survey contrasts execs’ assessments of current IT priorities with their vision of a more ideal state. While most responses emphasized operational excellence in describing the current state of IT in their organizations, opinions on the ideal IT role show much heavier emphasis on innovation. Presently, nearly half of all executives said IT is focused on improving the effectiveness (47 percent) and efficiency (45 percent) of business processes and reducing IT costs (44 percent). Yet an ideal CIO, they indicate, would have a greater role for IT in creating business value—only 17 percent of respondents emphasized reducing operational costs as an IT priority, while 47 percent cited creating new products.

Perhaps the biggest change in current IT priorities, according to the respondents, was in providing information to support planning and decision making. While that scored 30 percent in 2010, it spiked to 40 percent in the new survey.

Other findings of the survey include:

A greater willingness to invest in IT.

  • Almost a quarter of executives surveyed said they expected to increase IT investments by more than 10 percent in 2012.
  • More executives said they expect increases in both operating expenses and new investments in the coming year than in previous years.
  • Asked to look three years out, execs foresaw operational costs dropping from just over half their budgets to 41 percent, with collaboration, innovation and analytics categories expected to total 46 percent.

Data increasingly drives decisions—with some reservations.

  • One-third of respondents say senior executives are demanding data for making decisions.
  • Add the demands of midlevel managers and that number climbs to two-thirds.
  • Growth of analytics is limited by three factors: Workplace preference for experience over data; lack of skill at synthesizing data; concerns about data quality.

New platforms are gaining ground.

  • Social media, cloud and Web 2.0 are all making inroads in the enterprise, though at this point mostly in pilot programs or select areas and not at scale.
  • 30 percent of respondents use mobile technology internally to support employee collaboration or access to internal systems at scale, with 35 percent more at least piloting.
  • Fewer respondents, only 8 percent, reach out to customers with mobile-specific apps such as location-based services.

Maintaining the momentum
A bright note is sounded by an increase in the number of IT executives who feel satisfied with their organization’s effectiveness in driving technology enablement or innovation: That climbed 11 percentage points to 30 percent. However, as CIOs wrestle with the tremendous change driven by new platforms, the demand for analytics and the consumerization of IT, they’ll have to work hard to build on that positive momentum.

You can find the full text of the survey on the McKinsey web site. Registration required.


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